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Sunday, February 21, 2010

Kisan Vikas Patra (KVP) is a saving instrument that provides interest income similar to bonds. Amount invested in Kisan Vikas Patra doubles on maturity after 8 years & 7 months. Some people have a misconception that only a farmer can invest money in Kisan Vikas Patra. However, it is absolutely false. Anyone wishing to invest money at safe places can go for Kisan Vikas Patra.

How to InvestOne can invest in any head post office / sub-post office in cash, demand draft, or local cheques. You just have to walk into a post office, and meet a clerk looking after KVP issues. He will give you a form. You just have to fill the form and submit it with the desired amount. A KVP would be issued to you. However, be mindful of taking a few of photographs of yours with you. You would need them to put on the form.

Who Can InvestKisan Vikas Patra can be purchased by the following:

An adult in his own name, or on behalf of a minor

A Trust

Two adults jointly

Tabs and DenominationsKisan Vikas Patra are available in the denominations of Rs 100, Rs 500, Rs 1000, Rs 5000, Rs. 10,000 and Rs. 50,000. There is no maximum limit on purchase of KVPs.

WithdrawlPremature encashment of the certificate is not permissible except at a discount in the case of death of the holder(s), forfeiture by a pledgee and when ordered by a court of law.

Who is not Eligible

Commercial Companies and institutions are not eligible to purchase KVP.

NRIs and Hindu Undivided Families cannot purchase Kisan Vikas Patra.

Maturity

Facility of reinvestment on maturity.

Maturity proceeds which are not drawn are eligible for Post office Savings account interest for a maximum period of two years.

Salient Features

KVPs can be pledged as security against a loan to Banks/Govt. Institutions.

KVPs are transferable to any Post office in India.

KVPs can be transferable from one person to another person before maturity.

Nomination Facility is available in case of KVPs

Duplicate can be issued for lost, stolen, destroyed, mutilated and defaced KVPs

Tax BenefitsNo income tax benefit is available under the Kisan Vikas Patra scheme. Interest income is taxable, however, the deposits are exempt from Tax Deduction at Source (TDS) at the time of withdrawal. KVP deposits are exempt from Wealth tax.

Disclaimer: Any action you choose to take in the markets is totally your own responsibility.www.tips4bsense.blogspot.com will not be liable for any, direct or indirect, consequential or incidental damages or loss arising out of the use of this information. This information is neither an offer to sell nor solicitation to buy any of the securities mentioned herein. The writers may or may not be trading in the securities mentioned.